loans question

L5

Hi,
would like some advice if anyone knows about loans, APRS etc. I end up getting confused when trying to work this out. Say someone had loans with 2 institutions, A and institution B.

Loans with A
8,556 at 4.95% due to be paid off in may 2013
2,125 at 8.25% due to be paid off in april 2013
loan total with institution A: 10,681

Loans with B
6,186 at 8.2% due to be paid off in june 2014
3,802 at 4.75% due to be paid off in mar 2014
loan total with institution B:9,988

Loan totals with A and B 20,669


Now say institution B offered to give one loan to clear the loans in A immediatly, and roll that loan into one loan of 20,669 at 8.59% to be cleared in January 2014. Is this beneficial? Would I pay less interest in total if i took that loan from them to consolidate the others, or would it end up costing me more?
Any help much appreciated, this is a genuine question and I cant figure it out myself.
thanks

Kennie1

Simple answer is yes as you are paying a higher interest rate over a longer period in the case of A which is the obivous one but I would guess that you would pay more with case B as well despite the shorter proposed term as there is a markable difference in APR for the second loan

L5

just to clarify, A and B are 2 different institutions, not two seperate scenarios.
So you think consolodating loans from A and B into one single loan with institution B at 8.59% would work out better ?
thanks again

Ogham

Without even working out the exact figures - I am sure you would be worse off if you roll all your loans into one at 8.59% to 2014
This rate is higher than any of the loans you have at the moment - and goes on longer than 2 of them.

It may be that the monthly payments will be lower than your current monthly payments - but they will be going on for longer.

What are your current monthly payments on the loans?
What will the payments be on the new single loan?

L5

Monthy payments are roughly 640 at minute. New ones would be about 600 p/m. If I kept repayment the same @640 pm would I still be worse off rolling them into one loan @ 8.59%?
thanks

L5

hi just wondering if anyone can answer whether there is any benefit to rolling the loans into one loan with institution B, as outlined above @ 8.59% or will i end up paying more interest than having the loans seperately as things stand.
tomorrow is my last day to decide what to do. Just wondering which option i pay less interest with.
thanks

phormium

Without working it out in detail as it would be complicated, you have to be worse off by consolidating because you are moving to a higher average rate than you are paying.